Trucking, Rail Freight Prices Surge, Trigger “Inflationary Concerns”

Everything is spiking.

When consumer products companies, retailers, oil-and-gas drillers, manufacturers, and other companies complain that shipping goods within the US is confronting them with soaring costs, capacity constraints, and delays, they’re not making this up. Trucking companies and railroads – an infamously cyclical industry that suffered through the “transportation recession” from 2015 through much of 2016 – are jacking up their prices with gusto.

The total amount that shippers spent on freight by truck, rail, barge, and air is skyrocketing, according to the Cass Freight Expenditure Index, which tracks the amounts spent by shippers on all modes of transportation. This spending is a function of price and volume. In May, soaring prices and shipping volume pushed spending up by 17.3% compared to a year ago, the 8th double-digit year-over-year increase in a row:

“May’s 17.3% increase clearly signals that capacity is tight, demand is strong, and shippers are willing to pay up for services to get goods delivered in all major modes throughout the transportation industry,” the Cass report said.

And the rising price of fuel and the related fuel surcharges added to the amounts spent: the price of diesel was up 27% at the end of May from a year ago.

The Cass Truckload Linehaul Index, which tracks per-mile full-truckload pricing but does not include fuel or fuel surcharges and is not impacted by rising diesel prices, jumped 9.0% in May compared to a year ago, the largest year-over-year increase in the data going back to 2005. And “the strength is continuing to accelerate,” Cass said in its Linehaul report:

And prices for “intermodal” freight are soaring. This is freight that involves a combination of several modes of transportation: in the continental US, mostly truck and rail, such as a container that is hauled by truck to an intermodal facility, loaded on a train, taken to the destination city where it’s transferred to a truck for final delivery. It can also be a semi-truck trailer whose trajectory includes piggybacking on special rail cars.

The Cass Intermodal Price Index, which includes fuel prices, jumped 9.1% in May compared to a year ago, the 20th month in a row of year-over-year increases, and the sharpest year-over-year increase since August 2011 coming out of the Great Recession.

“Tight truckload capacity and higher diesel prices are creating incremental demand and pricing power for domestic intermodal,” the Cass Intermodal report said. This is what the May spike looks like:

Demand has been very strong across all modes of transportation. Freight shipment volume (not pricing) by truck, rail, air, and barge, according to the Cass Freight Index, spiked 11.9% in May compared to a year ago, which had already been strong. This pushed the index, which is not seasonally adjusted, to its highest level for any May since 2006:

The report explained the resulting “inflationary concerns”:

These indices are displaying accelerating strength on top of increasingly difficult comparisons. Demand is exceeding capacity in most modes of transportation by a significant amount. In turn, pricing power has erupted in those modes to levels that continue to spark overall inflationary concerns in the broader economy.

Some of the blame for tight capacity in the trucking sector earlier this year has been directed at the newly required Electronic Logging Devices (ELDs) that record actual drive times by truckers and thus help enforce the legal hourly limits truckers can drive. This hurt capacity and utilization of truckers early on. But Cass points out that “many of the truckers most adversely affected are now beginning to recover some of the loss in utilization through gains in efficiency.”

So the consumer economy is clicking along, and e-commerce is rocketing higher, with all the transportation challenges this causes. Industrial demand on transportation is strong as well.

For this, the weekly DAT Flatbed Barometer is a good indicator, as flatbed trailers are used to haul big pieces of equipment for construction, manufacturing, oil and gas drilling, and the like. Flatbed spot rates have exceeded contract rates since September 2017, according to Cass, citing DAT data. In May, spot prices shot up 26.6% from a year ago, and contract prices rose 10.9%. This excludes fuel surcharge, which skyrocketed 53.8% in May, year-over-year (click to enlarge):

The chart above of the DAT’s Flatbed Weekly Barometer shows an astonishing spike in demand for flatbed trailers. Obviously, what skyrocketed exponentially in this manner is practically begging for the transportation sector’s infamous cyclicality to come around and knock it down again.

Yes, it’s a cyclical matter, but every economic cycle gets more and more extreme in each iteration, like a pendulum that’s accelerating instead of decelerating. Next transportation recession is going to be brutal.

alex in san jose AKA digital Detroit

Jun 18, 2018 at 3:52 pm

It’s a classic case of a system with no dampening. In the economic system, dampening would appear in the form of a real social safety net, progressive rather than regressive taxes, gov’t run and free or largely free college and technical training, etc.

In other words, a classical Western European social democracy would not experience these boom-and-crash cycles that rule our lives here.

Álvaro (from Spain)

Jun 19, 2018 at 1:11 am

> a classical Western European social democracy

As an European, I advise you not to idealize European socialdemocracies :-)

Beard681

Jun 20, 2018 at 7:24 am

Sorry I am not an economist, just a lowly engineer, but to dampen swings in any control loop you need to increase (preferably derivative) negative feedback and decrease response times (i.e. in a digital system increase the sample rate).

Therefore government run and free stuff will worsen swings. That is because government programs are notoriously slow responding and free anything means that there is no feedback signals to say “what you are doing doesn’t make economic sense as there is no ROI”.

Of course in a socialist command and control economy (i.e. feed forward system) there are no swings as they are totally static and immune to change – which is what the people running them usually want.

Adrian

Jun 25, 2018 at 12:32 pm

Maybe you’re unfamiliar with the economic issues of Ireland, Italy and Greece? Government interference at the behest of central banks is the driver that accelerates the pendulum. See Rothbard’s theory on boom/bust cycles.

Jay

Jun 18, 2018 at 6:31 am

In my job search, I’ve noticed more adds for truck drivers. The truck driving jobs are paying more than the finance and accounting jobs I have looked at. I’m looking at the short term courier it pays more than the finance temp jobs I get called on, and at least a H1-B visa worker won’t take that job from me.

Wisil

Jun 18, 2018 at 6:57 am

No, but an autonomous truck driving computer will likely take the job in the next several years.
The computer will not be subject to hours worked, healthcare, rest stop meals, accidents due to fatigue or distraction, or union issues.

Computer controlled trains are even better, and wold eliminate all the silly human error accidents that have happened over the last several years.

Ethan in NoVA

Jun 18, 2018 at 10:19 am

But they don’t implement computer controlled trains very rapidly in the USA. Somehow it costs billions of dollars to equip an Amtrak train with a TomTom.

As for the rest of the industry going driverless, they still haven’t finished that pesky liability thing on public highways. The question of “Who can we sue”?, in the litigous US is unsolvable.

The only drone trucks I forsee are in captive/private environemets like mine sites, factory yards, warehouses, etc.

cd

Jun 18, 2018 at 1:57 pm

Throw in all the insurance issues and that so far GPS and algos cannot see the log in the road or trash can blocking the line of site, the little girl playing ball on the side of street etc…

20-25 years off easily…

alex in san jose AKA digital Detroit

Jun 18, 2018 at 3:54 pm

cd – that’s what they were saying in an NPR thing about trucking on the radio.

25 years, at least.

My argument against them is that they’ll end up costing so much to make and maintain that people will be cheaper.

TropicalSunset

Jun 18, 2018 at 9:36 pm

driverless cars and trucks are so overhyped. If you are a truck driver, you have no worries about a 100% driverless truck taking your job for at least 10 yrs, if not 20. I find the people who hype driverless vehicles have not really looked into it in depth. Lots of challenges.

nick kelly

Jun 18, 2018 at 10:59 pm

‘We made a mistake trying to fully automate the Model 3 factory

Humans are under rated’

Elon Musk

Guy Daley

Jun 19, 2018 at 12:35 pm

Not a snowball’s chance and “next several years” is ridiculously, absurdly optimistic. Nobody is going to take the risk of putting a truck and its 80,000 pound load in the hands of a computer.

You’re giving robotics way, WAAAAY too much credit. We’re going to stick to having them make hamburgers for a while before we graduate to having them drive weapons of mass destruction.

Nick

Jun 24, 2018 at 2:31 am

That’s right. Don’t anyone worry, it’s all-l-l-l just a bunch of hoooey. Unless…….. the increased pay expectations and the growing shortage of qualified drivers, just, oh say…. creates a bit of a need. Then there’s the increasing growth of AI…. Who knows, maybe it won’t be the trucks that are so automated as much as it is…….. the drivers themselves. lol. but that’s just silly. Imagine a truck driving robot that would cost much less than a brand new truck, use current vehicles, and , and……. Ohhh, hoo hoooo. I’m just being silly, I know it. Don’t cho worry……… nope

blindfaith

Jun 18, 2018 at 7:00 am

With so much BS on media and in the airwaves, perhaps some is being diverted to the truckers…fast door to door delivery incase you have tuned it out otherwise.

I don’t know where all this sunshine comes from unless some data fell behind a desk and is now discovered and added into these number, but I do not see it…physically. if anything I see fewer tractor trailer trucks on the road now then in past years. I see shopping centers with fewer and fewer tenants. I see dumpsters empty. I see big box stores with fewer and fewer customers. Is some of this related to the hurricanes of last year, if so, that will fade out. If it is related to home construction, that too is staring into the face of slim times.

So, with FedEx, UPS, and The Post office all raising their rates to nose bleed levels, and reducing the dimensional weight, it has softened if not stopped my buying….that is a fact. For example 30 pounds cross country has gone from under $60 to just shy of $100 since January.

Sorry you are not participating in the recovery, but it’s obvious muppets are finally great again.

cd

Jun 18, 2018 at 1:59 pm

the big arteries in California are backed full of trucks of all types, my last drive on the hwy 5 after 30 years of driving that stretch was easily the most convoys I have ever seen from LA to SF

Wendy

Jun 18, 2018 at 7:11 am

The cure for increasing prices is…..increasing prices. If rail and shipping rates go up too fast, higher prices will quell consumer demand. Think abort it. If amazon prime increased to $300 to cover increasing shipping costs, demand for these products would decrease as more money spent on shipping would mean less money for items. Only with wage growth will inflation rekindle, or we will have stagflation leading to a recession.

Kent

Jun 18, 2018 at 12:08 pm

+1. Simple fact that most overlook.

alex in san jose AKA digital Detroit

Jun 18, 2018 at 7:42 pm

If Amazon Prime increased to $300 I’d probably be out.

I’ve had very spotty results with items coming at all, coming not broken, etc. I’ve found that many things are not to be bought online at all, like clothes and shoes.

I’ve found that other items are only to be bought locally from entities who have a vested interest in your doing OK with them. Buy your cell phone from your carrier. It will cost 2X as much but it will work. Buy your music stuff from a local music store or at least your local Guitar Center which is staffed by locals.

Finally, I’m finding a few good arguments for buying stuff online from Ebay rather than Amazon. For one thing, while it’s kind of hot in here and I have to pack a laser to ship to Europe, it’s not an Amazon warehouse. You really can deal with mom and pop, or pop and his garage. Secondly, the shipping success etc is MUCH better on Ebay. I know this from literally 20 years as a seller, and my boss buys a ton of stuff off of Ebay and he’s had much better success than I have had with Amazon.

Most recently, I sold a “twinax” connector and simply can’t find the bloody thing. It’s a $10 part, and with the shipping I refunded the customer his $13, sooner than he’s even apparently had time to look at things closely, because I’ve gone to a 1-business-day turnaround.

I’ve recently discovered a neat movie, A Bronx Tale. I like “wise guy” movies and this looks like a gem. I’ve just found snippets on YouTube but I want to see the whole thing. It’s far easier to buy the DVD on Ebay than on Amazon. I may switch loyalties … I can see my boss now (opening up mystery package) “Wait a minute, I didn’t order this…” I’ll have to come up with a system to show which packages are for me lol.

In my 44 years of logistics experience, I have never seen such a truck and driver shortage resulting in reduced velocity in North America. You mention the introduction of ELD’s as a factor. Many seasoned drivers have retired rather than adopt this new computer program. As well, Trump’s corporate tax reduction created new manufacturing jobs that lured drivers into these positions with more regular hours and nights and weekends off.

The trucking companies I talk with say the only solution is increased driver wages and new driver training to entice more people into the trucking industry. This will, of course, raise freight rates even more. No one expects the problem to end shortly and many expect it to continue through 2019.

As far as autonomous trucks are concerned, it will happen, but not soon. It will take a long time to create the electronic and roadway imbedded infrastructure. We’ll likely first see more convoys on multi-lane highways with a lead truck operated by a driver followed by autonomous trucks. Needless to say, motorists won’t be happy trying to pass them or change lanes.

Paulo

Jun 18, 2018 at 12:15 pm

They already have this. It’s called freight trains…run on private tracks and away from the public. Then, switch out to container trucks…with drivers. Pay what it costs. Too expensive, then The Market will control it. Still too expensive, the product probably isn’t necessary.

This is what happens when the cost of energy rises. it’s part of the looming decline, and just another thing to get used to like unaffordable educations, unaffordable housing, restaurants, etc.

I used to fly and also ran a small float airline on the BC Coast. Pilots were well paid and the job was awesome. When costs were not a factor there were 30+ planes operating out of our base. I think today there are 4. The decline started in the late ’70s, coinciding with the first oil shock. These days, they can’t find pilots. I’ve been retired for years, and out of the aviation industry for over 20 years….. and I still get job offers to go flying. This year it was $10,000/month plus housing supplied. The owner knew I hadn’t flown for 15 years!

Pilots don’t go into this industry any longer. It’s worse for helicopters. My best friend is 58 and is considered to be one of the ‘old hands’ in rotary. He is presently sitting at home being paid $500/day in case something comes up. He will go flying soon, but meanwhile he stays at home being paid his minimum. When he starts flying the wage increases. He spends his days hiking the beaches. When his cell phone commands he’ll grab his bag and catch a flight north which the company will have arranged for, including hotels, meals, and transportation. It sounds extravagent, but is really just part of the gig economy. It’s cheaper for a company to pay someone $50,000 plus expenses for 3 months work (maybe) than to hire someone who lives there and expects a full time job.

regards

Valuationguy

Jun 18, 2018 at 3:32 pm

Gerold,
Entirely agree with you. The driver shortage in the garbage industry alone is ACUTE….and its entirely due to underinvestment in the training pipeline for new drivers. None of the majors invested in training NEW drivers (just previously experienced ones)…and today’s generation sees the trash industry as non-glamorous (despite being quite profitable).

For over 15 years, companies in the industry have been poaching each other (and other industries) to find the drivers they need and with the recent increased retirements (which was entirely foreseeable due to the demographics of the job segment), the gap has widened to the point at which locations can’t pick up the garbage if more than two or three drivers in a location take vacation (or get sick, quit, etc). The industry has become TOO LEAN….and now is going to have to overreact on the wage side to attract candidates. This will result in higher prices to local gov’ts (passed on to local citizens)…i.e. more inflation.

Beard681

Jun 20, 2018 at 7:34 am

I know that garbage haulers lost a lot of drivers when they were forced to have drivers drug tested.

One guy I know when he lost his CDL due to failed pee tests said “Who do they expect to pick up the gabage?”)

DK

Jun 18, 2018 at 8:32 am

The real knock-on from this is that it’s just more fuel for Fed rate hikes.

Old Farmer

Jun 18, 2018 at 8:52 am

I had to have a farm tractor shipped this year. Put it out at the usual price, and got no bids. After two weeks I raised the offer by 10% and finally got a hauler. Turned out to be a guy with a 3/4 ton pickup pulling a trailer with two vehicles–not a traditional carrier. I asked him if he made a good living doing this. He didn’t know–this was his first load–but he thought it was promising.

RD Blakeslee

Jun 18, 2018 at 10:22 am

Funny how “Yankee ingenuity” keeps popping up here and there.

When I needed a house moved in 1970, an entrepreneur use surplus armored personnel carriers and dolly made of B29 wheels to “git ‘er dun”.

when companies cannot find full truckload capacity (VAN) the shipment will be broken up into smaller shipments. Example you have 20 pallets to ship to a customer in CA from SC. You will shift that to LTL in a few shipments with your LTL carrier…. let’s say R&L or SAIA. You will ship each day starting today 4 shipments of five pallets. Now think about if every shipper has to start doing that. LTL carriers are seeing giant volume spikes and the OS&D (over, short and damaged) numbers are also spiking so your customers are getting their product in 4 shipments vs. one. The number of touches by the LTL carrier is much higher, the cost/lb is typically higher, and the transit time is slower. These shifts are typical when one mode is overloaded with demand. FYI… flatbed capacity in the mid Atlantic and South is horrible. Takes a week to find a flatbed to move billet copper from SC to NH. DAT had 4536 shipments/42 available flatbeds in the SC area last week. The pricing has become insane.

thejerkstore

Jun 18, 2018 at 2:13 pm

I own a hotshot employing 4 full time drivers, last yr this time we were getting +/- $1.75 mile, now we are getting $2.25-2.45 mile, east coast, NYC, any of the 5 boroughs (minus Manhattan) gets you $3-3.15/mile, plus $200 towards toll costs. Three of my drivers will clip $100k this yr, this is shaping up to my best yr yet.

cd

Jun 19, 2018 at 8:50 am

Congrats to you and your team…

nick kelly

Jun 18, 2018 at 9:32 am

The Cass index does not include fuel but of course the cost of fuel is maybe the largest single variable in the cost of transportation.

I was tempted to say therefore we need to double the rise in the index to add the rise in fuel but maybe some of that is already built into the price shippers are demanding. Maybe they are adding a fuel surcharge without quoting it.

I wonder if the Fed would like it broken out because maybe they see inflation due to the rise in the price of oil as less of a threat (or barometer) than inflation due to rising demand.

Paulo

Jun 18, 2018 at 12:23 pm

In aviation they charge a fuel surcharge. Otherwise, they would have to adjust their rates, constantly. Simple enough with a spreadsheet, but it is mostly done to lower the complaint level. I would assume the same is true for trucking, or if it isn’t it should be.

Hell, the Majors charge for luggage. It’s just a way to control cost variables and charge standard fees across the spectrum. Truckers do this by weight, and also by size of loads.

davefairtex

Jun 18, 2018 at 12:05 pm

A long haul trucker I know said that there were some recent new rule changes that made it so he could no longer drive for nearly as many hours straight – something about a computer that would basically shut the engine off for 8 hours after a certain number of hours of operation. This made it so he had to recruit a second driver to partner with him, in order to get around these restrictions. Or something – I’m not entirely clear. Bottom line – it sure seemed like whatever this change was, ended up reducing the number of hours that the existing set of long-hauls driver could put in, which of course would have the predictable effect of causing a driver shortage.

Erich

Jun 18, 2018 at 12:56 pm

Both western railroads, the Union Pacific (UP) and the Burlington North Santa Fe (BNSF), are in a huge hiring mode. A hiring bonus of $25,000 is being offered by the UP at certain terminals around their system. I believe BNSF is also offering a hiring bonus at several of their terminals. Back east Norfolk Southern (NS) is also hiring. Only CSXT is not hiring at the moment. That’s mainly because it’s being run into the ground by a hedge fund that owns it. It will be interesting to see how far the FRA lets them get away with it.

As someone who just retired after 40 years in the industry I’m glad to see this happening. The more people paying into RRB the better ….

BirdBrain

Jun 18, 2018 at 2:35 pm

Must stay with them 3 years to get the full bonus, don’t forget that part.

raxadian

Jun 18, 2018 at 1:43 pm

This will just keep getting worse as more and more types of stores close down when online services steal their customers. Thus more goods will be delivered right to people instead of said people buying them in person and picking them in the store they bought it.

Kevin Conkle

Jun 18, 2018 at 3:06 pm

Those who think we’re 20 years from autonomous line haul are out of touch. It will happen faster. The money is there, and the more expensive the driver is the faster it will happen. Not just wages, but insurance, number of hours on the road, maintenance costs, etc figured in make the use of robotics very close to reality. Yes, some industries will still use drivers, but as there are SIX MILLION people driving in the USA alone the unemployment is going to drive their salaries into the ground.

I can foresee rail being the primary long haul method with trucks restricted to less than 100 miles from the distro center and trucks that cannot turn in their own lane being barred from urban streets during normal business hours to ease congestion and pollution concerns. Europe will lead in this, but the US will follow. This type of shipping is ideal for robotic carriers and material handling equipment.

TropicalSunset

Jun 18, 2018 at 9:59 pm

Have you really studied the driverless car industry? They haven’t even tested one single car without a human safety driver in it to drive itself around basic city streets. There is so much to it! Trucks being able to go on auto-pilot (basically cruse control plus) is NOT driverless! There is still a driver that needs to be paid. Getting rid of the driver totally to me is a long ways off. There are a lot of hurdles.

I find most people who claim driverless vehicles are “right around the corner” usually just read some PR hype articles and haven’t really studied where the technology is actually at, and what has been done to date.

John

Jun 18, 2018 at 3:28 pm

Autonomous trucks are already running between CA and TX.When they approach the city local drivers take over and make deliveries.

Trucks that have safety drivers in them to take over are not “self-driving”! That is basically “glorified cruise control”. Wake me when there are trucks driving themselves from LA to Dallas with no driver at all in them.

John

Jun 18, 2018 at 11:14 pm

That is not the point.The point is that the warm body ( flesh bag as the article says) in the passenger seat will be paid minimum wage.And the body in the sleeper will not be paid at all.

To the best of my knowledge only Walmart drivers are presently paid $12 per hour for time spent in the sleeper.But Walmart (and probably UPS) drivers are the select few.

Guy Daley

Jun 19, 2018 at 12:47 pm

So in essence the truck has cruise control? And that makes it autonomous? You can’t ditch the driver. There are too many variables involved and a big rig is a weapon of mass destruction without an operator than can anticipate and/or react to all variables.

Driver seat is empty.And whoever sits in the passenger seat or plays video games in the sleeper will not be paid 40-50 cents per mile.

Maybe they will name him “load escort” or “load security” but this inmate of moving prison cell will be paid minimum wage.

cdr

Jun 18, 2018 at 3:35 pm

The end of deflation, caused by bad monetary policy, does not equal inflation. It equals normalization. The end result is the same … higher prices. The problem is that deflation created lower incomes so that incomes do not match prices at this time. Rising transport prices are a reflection of an economy getting back to normal. Unfortunately, incomes aren’t rising as fast. Getting people to jobs and paying them right is the next problem to solve.

I suspect the euro migration problem is the bad end result of a globalist fantasy where labor from the middle east would come to the EU and work cheap while assimilating into happy and grateful EU citizens. So much for that. Glad it’s over there and not here. All we have is a little transport inflation and a problem of how to enlarge a competent labor force.

Prairies

Jun 18, 2018 at 5:00 pm

Just a heads up on the autonomous vehicles. They won’t be “driverless” until they can guarantee flawless operation. In the Ag industry self driving is already being applied, but a driver has to operate it to ensure proper operation.

The next wave of autonomous will be used to give drivers less stress by switching over control in low speed congestion and possibly assist in low speed maneuvers like parking(similar to Ford park assist). A driver will have to load and unload, plug in or refuel, grease the driveline, do a circle check. There are no sensors for missing wheel nuts, only the eyes of the operator will detect some items and if those items fail it is on the operator to take responsibility.

Just one last tid bit for a real world scenario. I work on a street that hasn’t existed on google maps for the 8 years it has been in existence. An operator has to find the location, I get a call once a month from a new delivery guy looking for the mystery location. Autonomous can’t solve that mystery, but a driver would likely be able to take over after the AI finds it can’t do the task.

Lion

Jun 18, 2018 at 7:49 pm

That’s going to be some program for the California trucks, where commuters will zip in front of a truck leaving less than 10 feet between their bumpers and then slamming the brakes. Of course the result will likely be one less commuter, so maybe that’s a solution………………

alex in san jose AKA digital Detroit

Jun 19, 2018 at 1:06 am

People are always doing stupid things around trucks. This zip in front then slow down thing is really common. They do it in front of other cars too, but it’s particularly bad with trucks which can’t stop or slow down as quickly as a truck or do quick maneuvers to avoid trading paint with cars.

Once I was riding my bike from Sunnyvale to Santa Clara to check out a friend’s parking lot sale, on a nice Sunday morning. I encountered a full sized semi/trailer rig over on its side, and a lady with a big SUV (like a Navigator or something) which of course is bitty compared to the truck, explaining/apologizing to the cop on scene. It was funny seeing the underside of the truck, I was thinking, “I always wondered what those looked like underneath”. You just know it was the lady in the SUV doing some zippy-dee-doo-dah maneuver that the trucker had to avoid, and flipped his rig.

Prairies

Jun 19, 2018 at 12:00 pm

I always find it entertaining seeing a car wedged infront of the trailer wheels because people insist on cutting into turning lanes beside trucks that need the space for wide turns. Let the computer try and figure that scenario though, can’t see it coming.

raxadian

Jun 18, 2018 at 9:43 pm

Why aren’t allcargo trains driven by AI yet? Trains can take way more cargo and are way safer than cars. Also traintracks driving is way easier to program and even if some accident happens, it would be because an idiot rammed a train or the driveless train went off tracks.

Self driving cars are still n evident beta, but we should have driveless trains today.

Edward Johnson

Jun 19, 2018 at 2:44 am

The BNSF finished installing FRA mandated Positive Train Control last year. It is now in the process of installing optional PTC because it wants total automated control as soon as possible on all of their main lines. In as much as its Southern Transcon is all multiple main track from Long Beach (LA) to Chicago, it is able to safely operate, without delays, intermodal double stack trains regularly up to 16,000 feet long (over 3 miles) with a capacity of well over 500 containers per train. Both the Northern and Southern Transcon operate intermodal trains at speeds up to 70 mph.

Their intermodal van business (piggybacks) has also exploded over the past year. Their carload business is also way up over this time last year. All of their trains operate with just a 2-man crew and even that could be reduced in the near future if the unions cooperate. The BNSF handles more freight traffic than any other private railroad in the world.

All the Class I railroads are reporting large increases of business. And don’t forget that all American freight railroads pay taxes on their right-of-ways that helps fund their competition (trucks and air freight). Plus, they can move a ton of freight up to 500 miles on a single gallon of diesel fuel.

I just scanned the article. It appears its giving ALL THE credit for increased costs to demand for shipping. Oil peaked at $72.00 a barrel just before Memorial Day. Naturally the shipping industry is going to pass on the increased cost of diesel.

Too bad the author did overlay his “cost of shipping” graph with cost of diesel graph.

I prominently discussed the costs of diesel and in what figures and charts the fuel costs are included and in what charts and figures they’re not included.

That’s what you get for “just scanning” the article. You miss the important points and then you make a comment to tell everyone that you didn’t read the article and that you missed the important points. Not cool.

Pl’n’l

Jun 19, 2018 at 8:27 pm

Just another symptom of “reset.” Anytime you hear a politician or central banker use the term “We will grow our way out of an economic slowdown”, what he is really saying is “We will print our way out.” What they will never understand is, they can’t print trucks and drivers.

Edward Johnson

Jun 21, 2018 at 1:25 am

So far, this year, the total freight volume is up 3% on Union Pacific RR, up 4% on Norfolk Southern RR, and up 5% on BNSF from last year. Vans are up 24% on BNSF, this year! In the past 2 weeks the BNSF has averaged 210,000 total units per week, which is near record volume.